To use a grossly simplified example:
You buy 100 shares of 1 GBP each when the exchange rate is 1 EUR. Your shares are held in sterling, your costs are in EUR
If GBP goes down to 80 cents (that is, 1 GBP buys 80 cents), your shareholding is worth 80 euros (but still 100 sterling).
If GBP goes up to 120 cents (that is, 1 GBP buys 120 cents), your shareholding is worth 120 euros (but still 100 sterling).
Does that make sense? As Chris says, in times of volatile currency movements, you are talking on more risk.